Unfortunately in the modern market, sometimes it's "stairs up, elevator down." The market has been in a methodical melt-up for most of the year, but, just like that, yesterday several days of constructive price action were erased. Yesterday we got the biggest sell-off in the market since last November amid macro concerns surrounding Italian elections, and increasing jitters over the March 1 sequester deadline. Futures are up slightly this morning, so traders will be using yesterday's low as their short-term point of reference.

Last Wednesday IBD put out its warning signal by putting their Big Picture in "rally under pressure." I generally take that as a good spot to reduce size and get flexible. Then yesterday the markets opened up and deteriorated during the course of the day, giving some opportunities to reduce or get short.

There were some faulty signals as the day unfolded. The S&P (INDEXSP:.INX) broke Friday's high around 1515, a point of reference, then took out Friday's low at 1502, another point of reference, then Thursday's low of 1497, a key point of reference. Ultimately yesterday's low is now the new pivot, which stands at 1487. IBD now has the market in "correction."

We have had a big travel range so it might take a little time to absorb. Resistance stands at 1497 then 1502. If the bears want to keep on extreme pressure, these levels will be shortable today, but in the age of these computers that push the envelope, 1511 is probably the "line in the sand" and can't be ruled out. Support is yesterday's pivot low as an actionable two way spot at 1487. The major spot if we can get there quickly would be the 50-day MA, and the prior September pivot that stands at 1474.

I am back in a tactical approach rather than portfolio approach (I started leaning toward this last Wednesday). This means I will bring down my time frame and take trades both long and short in an attempt to create some cash flow going a level vs. a level in both directions. I will use this approach until I see a day like we've seen many times in the last few years to create a change. Key inflection points over the last 16 months have been October 4, 2011, June 4, 2012, and November 16, 2012. These were all days to take notice that led to new direction. This type of day probably doesn't happen for a bit, so be patient.

Fed Chairman Ben Bernanke speaks today at 10:00 a.m. ET and his prepared remarks might change a bit with the market under pressure. I guess his office might need to stay accommodative a bit longer. Let's see how the market responds to his congressional testimony.

As far as individual names, I would use high level stops if you haven't been stopped out of some names already. The most important thing is that you know your time frame. For pure momentum traders, it's important that you find a few stocks you are comfortable with and become intimately familiar with them. Even when macro turmoil hits the market, you can turn to those stocks for two-way action. Many momentum traders have been turning to the 3-D printing stocks, which have been extremely volatile. The sector has been in correction mode for the last few weeks, which intensified yesterday before the open with 3D Systems (NYSE:DDD) earnings. However, the stock was able to bounce decently off the lows, and there generally seems to be buying interest on dips for this innovative technology.

If you are looking for cash flow, look at yesterday's lows in whatever group you're trading and trade around that level for action. "Red Dog Reversals" are great for cash flow in this environment, but you probably need to book profits rather than let stocks run because I don't think we will see them turn into major inflection points right now. Use more calculated strategies where you know your risk. My trading oscillator is -40ish, which is oversold, but extremes happen at -70.